The Global Forum also issued 3 supplementary reports - for Barbados, Bermuda and Qatar – which assess the whether these jurisdictions have acted upon the Forum’s recommendations to improve agreements and legislation. All three jurisdictions’ compliance with the international standards has progressing significantly. The Phase 2 reviews for Bermuda and Qatar will take place in the second half of 2012 and for Barbados in the first half of 2013.

These in depth reviews identify deficiencies and make recommendations on how the jurisdictions should address these concerns. The legal and regulatory framework is improving quickly in many jurisdictions. Previously, 11 jurisdictions were not able to move to the second phase in the review process. As a result of work by Barbados to establish a network of international agreements to underpin information exchange in tax matters, Barbados can now move to its Phase 2 review.

The reports of Costa Rica and Guatemala, however, conclude that they will not yet move to the next stage of the review process because the deficiencies in their legal frameworks are serious. This will be reconsidered once reports on their progress are received.

Korea: Korea has long been negotiating tax treaties and now has an extensive network of bilateral agreements that provide for exchange of information (EOI) in tax matters with 86 jurisdictions. Korea’s legal framework ensures the availability of banking information as well as ownership and accounting information for companies, partnerships and trusts, although improvements are needed for information pertaining to holders of bearer shares. Korea’s network of EOI agreements, as well as its tax authorities’ broad powers to gather information, ensure effective exchange of information with a large number of jurisdictions. The report also highlights steps taken by Korea over the last two years which have lead to measurable improvements in Korea’s capacities to answer incoming requests received from other jurisdictions in a timely manner. See the EOI Portal page for Korea: http://www.eoi-tax.org/jurisdictions/KR.

Reports on the legal framework (Phase 1)

Brazil: The legal and regulatory framework for the exchange of tax information in Brazil is in place. Brazil has a network of EOI agreements with 34 jurisdictions, but some gaps remain with regards to older treaties due to restrictions in the conventions, combined or not with restrictions in its treaty partners’ domestic laws. The review recommends that Brazil move more quickly from signing EOI agreements to bringing them into force, speeding up the process which at present can take up to 2 years. Brazil also signed the multilateral Convention on Mutual Administrative Assistance in Tax Matters during the G20 Summit in November 2011, confirming its commitment to the internationally agreed standard. Brazil’s response to the recommendations made in this review, as well as the application of the legal framework in practice, will be considered in detail in the Phase 2 Peer Review of Brazil which is scheduled for the first half of 2012. See the EOI Portal page for Brazil: http://www.eoi-tax.org/jurisdictions/BR.

Chile: The legal and regulatory framework for the availability of information in Chile is in place to a large extent. Though some procedural aspects need improvement, legislation passed in 2009 allows full exchange of bank information so Chilean tax authorities have access powers to all relevant information. Chile has a network of agreements that provide for exchange of information in tax matters to 27 partner jurisdictions of which 25 meet the standard. Chile also continues negotiating new DTCs and recently started negotiating TIEAs. Chile’s response to the recommendations in this report, as well as the application of the legal framework to the practices of its competent authority will be considered in detail in the Phase 2 Peer Review of Chile, which is scheduled for the second half of 2013. See the EOI Portal page for Chile: http://www.eoi-tax.org/jurisdictions/CL.

Costa Rica: Though Costa Rica has signed 13 new TIEAs and a Mutual Convention is in effect with Guatemala and Honduras, it’s domestic laws might hamper effective exchange of information. In particular, ownership and accounting information related to companies, partnerships and trusts is not always available and the tax administration has insufficient powers to access information requested by foreign counterparts. As none of Costa Rica’s EOI agreements therefore meet global standards and a number of elements crucial to effective exchange of information are not yet in place, Costa Rica will not move to a Phase 2 Review until it acts on the recommendations made in this review. Costa Rica will report back on the steps taken to address the recommendations made in this review within 6 months. See the EOI Portal page for Costa Rica: http://www.eoi-tax.org/jurisdictions/CR.

Cyprus: Cyprus has a network of DTCs covering 44 jurisdictions and it also exchanges tax information with other EU members. Its DTCs generally contain provisions which allow Cyprus to exchange all foreseeably relevant information. However, deficiencies have been identified regarding the availability of ownership and accounting information, and the review recommends changes to address these. The report also recommends improvements in the EOI network to ensure Cyprus has agreements to the standard with all relevant partners and will enact appropriate legislation to give effect to these agreements in all cases. Cyprus’ response to the recommendations made in this review, as well as the application of the legal framework and the implementation of the international standard in practice, will be considered in detail in the Phase 2 review of Cyprus, which is scheduled to commence in the second half of 2012. See the EOI Portal page for Cyprus: http://www.eoi-tax.org/jurisdictions/CY.

Czech Republic: Almost all the Czech Republic’s large network of 87 agreements are in force and in line with the international standard. In addition, it exchanges tax information with other EU members under EU instruments. Some gaps exist however with regards to the availability of ownership information on foreign companies in the Czech Republic. More significantly, there is insufficient information on the owners of bearer shares issued by public limited companies. The Czech Republic’s response to the recommendations made in this review, as well as the application of the legal framework and the implementation of the international standard in practice, will be considered in detail in the Phase 2 review of the Czech Republic, which is scheduled to commence in the first half of 2013. The Czech Republic will report back on the steps taken to address the recommendations made in this review within 6 months. See the EOI Portal page for the Czech Republic http://www.eoi-tax.org/jurisdictions/CZ.

Guatemala: Guatemala is party to a Multilateral Convention which provides for exchange of information on request in tax matters between Guatemala, Costa Rica and Honduras and it is in the process of negotiating agreements with 15 other jurisdictions. However, due to restrictions in Guatemala’s domestic law, it has no agreements that provide for effective exchange of information with its partners. The tax authority does not have adequate powers to access information and ownership information is not always available for foreign companies, foreign partnerships or foreign trusts active in Guatemala. As a number of elements which are crucial to achieving effective exchange of information are not in place, Guatemala will not move to a Phase 2 Review until it has acted on the recommendations made in this review. Guatemala will report back on the steps taken to address the recommendations made in this review within 6 months. See the EOI Portal page for Guatemala: http://www.eoi-tax.org/jurisdictions/GT.

Malta: The legal and regulatory framework for exchange of information in Malta is in place. Ownership and identity information, as well as accounting information, is maintained by entities in line with the international standard. In addition, a lot of information must be filed with the government authorities, in particular the tax authorities and the commercial register. Full banking information is available in Malta, including records of all transactions. Malta has committed to the international standards of transparency and effective exchange of information. It has a broad network of 66 treaties, almost all of which conform to the international standard, and continues to expand its network of agreements. Malta’s response to recommendations made in its review as well as the application of its legal framework in practice, will be considered in detail in the Phase 2 Peer Review which is scheduled for the second half of 2012. See the EOI Portal page for Malta: http://www.eoi-tax.org/jurisdictions/MT.

Mexico: Mexico has signed DTCs and TIEAs with 60 jurisdictions, the large majority of which are currently in force and allow Mexico to exchange information in line with the international standard. Mexico is in advanced stages of negotiation of DTCs and TIEAs with further jurisdictions, mostly Global Forum members, including OECD and G20 members. Mexico has a strong legal framework which ensures the availability of banking information as well as ownership and accounting information for companies and partnerships, though information is not always available for those foreign trusts which are administered in Mexico or in respect of which a trustee is resident in Mexico. Mexico’s response to the recommendations made in its review, as well as the application of its legal framework in practice, will be considered in detail in the Phase 2 Peer Review of Mexico, which is scheduled for the second half of 2013. See the EOI Portal page for Mexico: http://www.eoi-tax.org/jurisdictions/MX.

Saint Vincent and the Grenadines: The legal and regulatory framework for transparency and exchange of information for tax purposes is largely in place for Saint Vincent and the Grenadines with regard to the availability of ownership and bank information and authorities have the power to access such information. It has also built up a good network of EOI agreements and can currently exchange information with 22 relevant partners. The review notes one main deficiency - the unavailability of accounting information for international business companies. Saint Vincent and the Grenadines’ response to the recommendations made in its review, as well as the application of its legal framework in practice, will be considered in detail in its Phase 2 Peer Review, which is scheduled to commence in the second half of 2013. See the EOI Portal page for Saint Vincent and the Grenadines: http://www.eoi-tax.org/jurisdictions/VC.

Slovak Republic: The Slovak Republic has a well developed legal framework for exchange of information for tax purposes. It has also built up an extensive network of EOI agreements, most of which are in line with the international standard, allowing it to exchange information with 62 jurisdictions. The review’s key concerns relate to the unavailability of ownership and accounting information for foreign trusts with Slovak-resident trustees and the wide scope of professional privilege for tax advisors and lawyers which may limit the tax administration’s access to needed information. The Slovak Republic’s response to the recommendations made in its review, as well as the application of its legal framework in practice, will be considered in detail in its Phase 2 Peer Review, which is scheduled to commence in the first half of 2013. See the EOI Portal page for the Slovak Republic: http://www.eoi-tax.org/jurisdictions/SK.

Supplementary Reports

Barbados: This supplementary report assesses the new exchange of information instruments signed by Barbados since its Phase 1 review report. As of January 2012, Barbados has EOI instruments with 37 partners, of which 16 meet the standard and another 9 will meet the standard once in force. Barbados also signed a protocol to its DTC with Canada in November 2011. Thus, Barbados now has EOI instruments to the standard with both of its prominent EOI partners and it continues to develop its exchange of information network. Given the progress made by Barbados since October 2010 to its legal and regulatory framework for transparency and exchange of information, in particular in respect of the elements that were found to be “not in place”, the Phase 2 review of Barbados will take place, in accordance with the schedule of reviews adopted by the Global Forum, during the first half of 2013. See the EOI Portal page for Barbados: http://www.eoi-tax.org/jurisdictions/BB.

Bermuda: This report assesses the new exchange of information instruments signed by Bermuda as well as steps it has taken to clarify existing agreements and some legislative amendments. As of January 2012, Bermuda has 30 EOI agreements, 20 of which are in force, the large majority of which are in line with the international standard. Bermuda has passed legislation to ensure that search and seizure powers are available to obtain information requested by its EOI partners. Bermuda is encouraged to continue to review and update its legal and regulatory framework in line with the remaining recommendations made in the 2010 Report, particularly as concerns the availability of ownership and accounting information. All further developments in the legal and regulatory framework, as well as the application of its framework in practice, will be considered in detail in the Phase 2 Peer Review which is scheduled to commence in the second half of 2012. See the EOI Portal page for Bermuda: http://www.eoi-tax.org/jurisdictions/BM.

Qatar: Qatar’s authorities have responded to the recommendations of the Phase 1 report by clarifying their access powers through a new regulation to the tax law and by providing a legal opinion from the QFC authority regarding the scope of their trust laws. Consequently, the recommendations made in the Phase 1 report are considered to be addressed in their entirety. As the only concerns with Qatar’s EOI agreements arose from this access powers issue, Qatar is now considered to have EOI agreements which provide for international exchange of information in line with the international standard. Since the Phase 1 report was prepared, Qatar has signed 7 double tax agreements and one protocol to one of its existing agreements. Any further developments in the legal and regulatory framework, as well as the application of its framework in practice, will be considered in detail in the Phase 2 Peer Review which is scheduled for the second half of 2012. See the EOI Portal page for Qatar: http://www.eoi-tax.org/jurisdictions/QA.